TORONTO, Aug 11 (Reuters) - The Canada Pension Plan
Investment Board, the nation's biggest public pension plan, said
it delivered gross investment returns of 1.9 percent in the
latest quarter, with the strong Canadian dollar hurting its
performance.

The CPPIB, which manages Canada's national pension fund and
invests on behalf of 20 million Canadians, said it ended the
first quarter on June 30 with net assets of C$326.5 billion
($257 billion), up from C$316.7 billion on March 31.

The fund has diversified internationally, becoming one of
the world's biggest investors in infrastructure and real estate.
It is also a major global investor in equities and bonds, and
derives the majority of its earnings from overseas.

The strength of the Canadian dollar, which hit a two-year
high in July, means that overseas earnings are not worth as much
when they are converted back to the fund's domestic currency.

"The strengthening Canadian dollar against most major
currencies applied downward pressure, a trend that accelerated
in the first half of the current quarter," said Chief Executive
Mark Machin.

Machin said global equity markets produced a significant
uplift during the last quarter, when gains from the fund's fixed
income investments also improved.

"I think, around the world generally, the underlying
economic trend is quite strong, and companies are doing quite
well on the back of that," Machin said in an interview.

Canada's second-largest public pension plan, the Caisse de
depot et placement du Quebec, said on Friday that it
achieved an average return of 5 percent on its investments in
the first half of 2017.

The Caisse, which manages pension plans in the mostly
French-speaking province of Quebec, said its net assets grew to
C$286.5 billion from C$270.7 billion at the end of 2016.

"In the first half of 2017, global equity markets continued
producing good returns," said Chief Executive Michael Sabia,
"while both volatility levels and interest rates remained low."